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Senate leader wants up to $1.5 billion on roads

A top Republican lawmaker said Tuesday he is gauging support in the Senate to raise $1.3 billion to $1.5 billion a year more to fix Michigan's roads and bridges, primarily by increasing fuel taxes in a vote that could be held as early as Wednesday.

"We would ramp this up over a four-year period of time so we're not going to hit people all at once," Senate Majority Leader Randy Richardville, R-Monroe, told reporters. "I've heard the message loud and clear that the roads are messed up. The most common phrase I'm hearing from back home is, 'just fix the roads.'"

His comments came before a Senate committee began considering parts of a House-approved plan that would infuse $450 million more into the state's $2.7 billion road and bridges budget. Gov. Rick Snyder says at least $1.3 billion is needed while others think the funding increase should be $2 billion.

Richardville may ask the full Senate to pass key road-funding bills, including a fuel tax increase, on Wednesday. It is crunch time if lawmakers are going to do something before the summer break and this year's elections.

The GOP-led House recently voted to raise the 15-cents-a-gallon diesel tax to the equivalent of the 19-cent gasoline tax and to start calculating both on wholesale prices so if prices rise from one year to the next, per-gallon taxes could rise by whatever is less: 1 cent, 5 percent or the annual change in highway construction costs. The proposed 6 percent wholesale tax would generate the same amount of gas tax revenue to start, however.

"If we're going to take a bite, we should just fix the problem all together," Richardville said.

He did not give specifics, but one plan being discussed could enact a 7.5 percent tax on the wholesale price, with yearly 1.5 percentage point bumps until it gets to 12 or 13.5 percent. Depending on prices, the 19-cent diesel and gasoline taxes could equal 42 cents a gallon in five years, providing an additional $1 billion.

Talk of tripling the marker laid down by the House drew support from the Michigan Chamber of Commerce, construction industry and Snyder administration, who said it is long past time to bring highways, roads and bridges up to par. Flat per-gallon fuel taxes — which were last raised in 1997 — have been faulted for declining state transportation revenue as people drive less and with more fuel-efficient vehicles.

But criticism was lodged by representatives of the oil industry and gas stations, who said motorists would be shocked by a potential 25-cents-a-gallon tax increase even if phased in. They also said moving to price-based fuel taxes is complex and unreliable, and suggested that legislators consider significantly raising vehicle registration fees as a more stable approach.

"You're making it more complicated," said John Griffin, executive director of Associated Petroleum Industries of Michigan. "The fleet's miles per gallon is going up. You're going to have to ratchet the (fuel tax) rate up if you want the same amount of money."

The Senate did change a House bill so license plate fees — which are based on a percentage of a vehicle's manufacturer's suggested retail price at the time it is first titled — would no longer drop by 10 percent each year for the first three annual plate renewals, generating $145 million more for transportation.

Following the House's lead, the Senate also is looking to permanently dedicate a portion of the 6 percent sales tax at the pump to transportation, generating $192 million more next year by taking it from the general fund. Unlike the House, the Senate bill would disburse a small share to public transit, pleasing a number of public transportation advocates who testified in opposition to the House-passed bills on Tuesday.